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SB 2158

AN ACT to amend and reenact section 15.1-12-29 of the North Dakota Century Code, relating to the distribution of the unobligated cash balance of a dissolved school district.

69th Legislative Assembly (2025-26) Introduced by Patrick Hatlestad and 3 co-sponsors

Prioritizes returning a dissolved district's unobligated cash to former taxpayers as tax credits or refunds, up to the district's last year's general fund expenditures.

Filed with Secretary Of State 04/17
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Bill Summary · SB 2158

Summary — SB 2158 (North Dakota)

An Act to amend and reenact section 15.1-12-29, N.D. Century Code — distribution of a dissolved school district’s unobligated cash balance; declared an emergency.

Purpose / Intent

SB 2158 clarifies and modifies how the remaining (unobligated) cash balance of a dissolved school district is handled. The bill (1) preserves a small reserve, (2) prioritizes returning available funds to former taxpayers of the dissolved district as tax credits or cash refunds, (3) allows a county committee to allocate a limited amount to other political subdivisions within the dissolved district’s boundaries, and (4) specifies how any residual balance is distributed among receiving school districts.

Key provisions and changes

  • Adds/reenacts § 15.1‑12‑29 (Dissolution of school district — Unobligated cash balance):

    • First, $10,000 must be set aside (per § 15.1‑12‑28) and required deposits made to the Job Service North Dakota reimbursement account (§ 15.1‑12‑28.1).
    • Tax credit/refund priority: Any remaining unobligated cash balance, up to an amount equal to the dissolved district’s general fund expenditures for its last school year, is treated as a credit for real property owners within the dissolved district against taxes levied by the district to which their property is now attached. If property from the dissolved district is attached to multiple receiving districts, credits/refunds are allocated proportionally based on each property’s taxable valuation relative to the dissolved district’s total taxable valuation at attachment.
    • County committee allocation: The county committee may distribute up to $500,000 of the remaining unobligated cash balance to another political subdivision located wholly or partly within the geographic boundaries of the dissolving district. After such a distribution, any remaining unobligated balance is handled in accordance with the tax‑credit/refund priority above.
    • Cash refunds permitted: With county commission approval, a school district required to provide a tax credit may instead provide cash refunds in lieu of credits. At the county auditor’s request, the district holding the balance must pay amounts to the county treasurer for issuance to property owners shown on the assessment list. Treasurers must first apply credits to any outstanding tax liens; remaining funds are paid to owners. Refunds must be calculated proportionately to total taxable value in the last year taxes were levied.
    • Residual distribution among receiving districts: After satisfying the tax credit/refund priority, the county auditor distributes any remaining unobligated cash balance among the receiving school districts in proportion to the percentage of the dissolved district’s taxable valuation that was attached to each receiving district.

  • Emergency clause: The Act declares an emergency.

Who is affected

  • Real property owners located within the boundaries of a dissolved school district (eligible for credits or cash refunds).
  • Receiving school districts (will receive proportional shares of any remaining balance after credits/refunds).
  • County committees, boards of county commissioners, county auditors and treasurers (responsible for allocation, approval and distribution mechanics).
  • Political subdivisions within the dissolved district’s geography (potential recipients of up to $500,000).

Procedural / timeline notes

  • Introduced: March 10, 2025.
  • Committee consideration and amendments occurred; the bill includes an emergency clause.
  • According to provided actions, the bill was passed by the Legislature (Senate and House votes shown in enrollment), sent to and signed by the Governor (signed April 15) and filed with the Secretary of State April 17, 2025. (Readers should consult the official legislative website or Secretary of State filings for final enacted text and dates.)

Practical impact

  • Ensures former taxpayers of a dissolved district receive priority return of available school district funds up to a concrete ceiling tied to the district’s last-year general fund expenditures.
  • Provides local flexibility for limited transfers (up to $500,000) to other political subdivisions within the dissolved district’s area.
  • Clarifies administrative procedures for cash refunds, lien handling, and proportional distribution to receiving districts.

Compiled from official sources — confirm details with the bill’s official record.

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